The Indian government has again scrapped a $500 million deal to purchase Spike anti-tank missiles from Israel’s Rafael defense contractor, Indian media reported Monday.
It was New Delhi’s second time abandoning the half-a-billion-dollar sale of the advanced missile, which was seen as a major milestone in relations between the two countries.
Government officials familiar with the deal told the Indian Express newspaper that Israel has been informed of the contract being abandoned in favor of an anti-tank guided missile from the local Defense Research & Development Organization, which said it could produce the weapons within two years, roughly the same amount of time it would reportedly take Rafael to fulfill the same order.
The government-owned Rafael Advanced Defense Systems refused to comment on the reports.
The deal was initially struck in 2014, and Rafael Advanced Defense Systems had begun preparations to fulfill the order of 8,000 Spike missiles. In August 2017, Rafael opened a production facility in India with its local partner, the Kalyani Group, in order to comply with the government’s “made in India” requirements.
Three months later, India pulled out of the deal, in favor of producing anti-tank missiles domestically. Indian media reports at the time said the reversal was made to protect the DRDO, which was developing its own version of the missile.
But in January, during an official visit to India that sought to foster closer economic ties, Prime Minister Benjamin Netanyahu said Narendra Modi’s government was “reauthorizing the Spike deal.”
According to Indian media, Modi’s government scaled down the order and awarded part of the contract, 5,000 missiles, to domestic manufacturers, and the remaining 3,000 missiles to the Rafael-Kalyani facility.
In December, an Indian government official told the My Nation Indian news website that the defense establishment was planning to back out of the deal with Rafael in favor of developing all of the missiles domestically.
Around that time, Indian officials requested that the Spike missiles undergo additional testing next year, saying the weapon’s infrared system failed to withstand high temperatures in previous rounds of testing. The Indian military was reportedly concerned about the missiles’ performance in hot desert conditions.
According to Israel’s The Marker financial newspaper, Israeli officials interpreted the request as a sign that New Delhi was looking for a way out of the approximately half-billion-dollar deal.
India, which has longstanding territorial disputes with neighbors China and Pakistan, has signed several big-ticket defense deals since Modi came to power in 2014.
It has been moving away from relying on traditional ally Russia for military hardware, and has deepened its ties to Israel, diplomatically and militarily.
Israel and India trade some $5 billion annually, with the majority of the deals in arms and diamonds.
Last year, Israel and India signed a $2 billion military arms deal, which includes the supply over several years of medium-range surface-to-air missiles, launchers, and communications technology.
Times of Israel staff contributed to this report.